American Furniture Manufacturing

American Furniture Manufacturing




American Furniture Manufacturing (“AFM”) was one of the country’s largest manufacturers of residential upholstered furniture focused exclusively on promotional price points.


AFM was a very rapidly growing business, having achieved $100 million in revenue in just four years. The company’s CEO/Founder was eager to diversify his personal wealth while partnering with a private equity firm who could help him professionalize the company’s systems and processes.

Investment Date: September 2001
Investment Status: Exited June 2004
Fund Equity Invested: $7.2 million
Process Type: Negotiated after introduction by a broker
Portfolio Team: James Donnelly, Calvin A. Neider

Post Acquisitions Initiatives

Management Augmentation:

  • Recruited an experienced CFO to build a finance department to replace an outsourced function.

Organic Growth:

  • Double productive capacity and warehouse space by expanding an existing facility and purchasing a new facility.
  • Introduced a complete motion upholstery line to complement the company’s stationary product lines.
  • Expanded trucking fleet to meet demand.

Tracking Critical Metrics:

  • Prior to acquisition worked with a national accounting firm to perform the first ever financial audit of the company.
  • Brought all financial functions in house, including payroll.
  • Implemented management systems which were non-existent at acquisition.
  • Implemented product costing.

Operating Results

Revenue increased 55% and EBITDA rose 44% while strong cash flow resulted in the elimination of nearly half the acquisition debt.


The company was sold to a private equity consortium in June 2004.

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